Previously known as Meridiana, Air Italy will be placed in liquidation after two years of heavy losses, shareholders announced after an emergency meeting on Tuesday.
In a statement, co-owners Alisarda and Qatar Airways said that flights from Tuesday through February 25 would be operated by other carriers.
Flights booked after that point will be refunded.
Alisarda, founded by the Aga Khan, controlled 51 per cent of Air Italy, while Qatar Airways had a 49 per cent stake in the company.
Investors had big plans for Air Italy when it was revived in February 2018, as the result of a fusion between Sardinia-based Meridiana and the original Air Italy, a smaller carrier based in Milan.
Hoping to replace Italy’s bankrupt flagship carrier Alitalia, Air Italy moved its international hub to Milan, expanded its domestic routes and added new long-haul flights to New York, Miami, Los Angeles, Bangkok, Delhi and others.
It also offered direct flights from Italy to locations in Africa, including Cairo and Lagos.
But the rapid growth didn’t pay off and Air Italy reported losses of €164 million in 2018, followed by an estimated €200 million in 2019.
As a result, the airline last year decided to scrap some of the international flights it had introduced just months earlier.
In a statement following Air Italy’s liquidation, Qatar Airways expressed that it would have been prepared to invest more in the airline.
“Even with the changing competitive environment and the increasingly difficult market conditions severely impacting the air transport industry, Qatar Airways has continually reaffirmed its commitment, as a minority shareholder, to continue investing in the company,” Qatar said in a statement.
“Qatar Airways was ready once again to play its part in supporting the growth of the airline, but this would only have been possible with the commitment of all shareholders.”
Air Italy employed around 1200 people.